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Management in social enterprises: the influence of the use of strategic tools in business performance

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Abstract

If social enterprises are to be competitive in the marketplace, they must use Strategic Management tools to improve efficiency, while maintaining their effectiveness levels. They can achieve this goal by introducing new management methods that make use of innovation. The aim of the current study was to analyze the effect of the use of management tools in social enterprises, referred to here as Social Management, on the effectiveness and efficiency levels of these enterprises. From a sample of 129 work integration social enterprises (WISEs), this study shows the existence of a statistically significant relationship between the application of Strategic Management tools, more commonly found in for-profit organizations, and the effectiveness and efficiency of WISEs in the social economy. The influence of the use of these tools was found to be positive in the case of social effectiveness (improving the employment rate) but negative in the case of economic effectiveness (profitability).

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Notes

  1. Sanchis and Campos (2007) used the VRIO framework to analyze the sources of sustainable competitive advantages of cooperatives and of the social economy.

  2. Ruiz et al. (2007) produced an example of the analysis of Porter’s five forces applied to WISEs.

  3. Among others: Opinion of the EESC on ‘Social entrepreneurship and social enterprise’ (exploratory opinion 2012/C 24/01) Official Journal of the European Union 28/01/2012.

  4. Law 1/2007, 5 February; Document BOE-A-2007-6033.

  5. This database collects general information (name of firm, tax residence and CNAE code) and the annual accounts of more than 1,000,000 Spanish companies and 325,000 Portuguese firms, which are obliged to submit their accounts to the Company Registers of their corresponding tax residences. The database is representative of all the Spanish enterprises registered in the Central Business Register (Directorio Central de Empresas or DIRCE).

  6. Retolaza et al. (2007) applied a similar methodology in their study on the efficiency of WISEs in 2006.

  7. This quantile has been used because it is the most representative quantile of the distribution of a discrete ordinal variable, since it describes the central tendency and is therefore less sensitive to outliers.

  8. These companies are also known as companies in transition because their aim is not to employ persons at risk of social exclusion on a permanent basis, but rather to train them in a professional setting so that they may subsequently find work in a company that is not dedicated to integration. However, some WISEs also seek to hire persons who face greater barriers to entering the labor market.

  9. Spanos and Lioukas (2001) defined three types of validity analysis: validity of content, validity of constructs, and nomological validity. In this study, we looked at the validity of the constructs since nomological validity did not apply.

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Authors and Affiliations

  1. Department of Business Management, University of Valencia, Valencia, Spain

    Joan R. Sanchis-Palacio, Vanessa Campos-Climent & Antonia Mohedano-Suanes

Authors
  1. Joan R. Sanchis-Palacio
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  2. Vanessa Campos-Climent
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  3. Antonia Mohedano-Suanes
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Correspondence to Joan R. Sanchis-Palacio.

Additional information

This work is the result of research project financed by University of Valencia with reference UV-INV-PRECOMP12-80589.

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Sanchis-Palacio, J.R., Campos-Climent, V. & Mohedano-Suanes, A. Management in social enterprises: the influence of the use of strategic tools in business performance. Int Entrep Manag J 9, 541–555 (2013). https://doi.org/10.1007/s11365-013-0262-7

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